拜登拟提高资本利得税的连锁影响、创始人心理

Jason Calacanis (00:00:00): Shout out to a company, Saxon and I were doing sales. Speaker 2 (00:00:05): Are you doing? What Jason Calacanis (00:00:06): the fuck? No. Chamath Palihapitiya (00:00:08): No. Okay. I did. that. No. Make that shit out. David Sacks (00:00:10): I said okay. Chamath Palihapitiya (00:00:11): Put that shit out. Shut the fuck Speaker 2 (00:00:13): up. Beat that shit out. Jason Calacanis (00:00:14): I just wanted to give a fatter a plow. Chamath Palihapitiya (00:00:16): You're such a scumbag. David Friedberg (00:00:17): What the fuck? Chamath Palihapitiya (00:00:18): Despite how time to, ma'am. You I've woken up now. Now I'm awake. You've awake in the joke. David Friedberg (00:00:22): I'm done. I quit. David Sacks (00:00:23): I'll give a shout out to -- which just got acquired by Speaker 2 (00:00:27): Oh, my god. I'm so sweaty. Jason Calacanis (00:00:30): We need plugs. Speaker 2 (00:00:33): We let your winter ride. Jason Calacanis (00:00:36): Rainman, David Sachs. Speaker 6 (00:00:40): We open source it to fans have a discovery. David Friedberg (00:00:44): Love you. Jason Calacanis (00:00:49): Hey, everybody. Welcome to the all in podcast. I'm Jason Calacanis with us today. The rain man himself calling in from an undisclosed location the queen of Kinois, and, of course, the dictator himself, Chamaalpaliapatiya. Alright, boys. How are we doing? David Friedberg (00:01:06): Feels low energy today. What's going on? Chamath Palihapitiya (00:01:08): Great. How are you? David Friedberg (00:01:09): What's going on? Chamath Palihapitiya (00:01:10): Let's go. Let's do this. I love this. I love it. Let's go. Love it. Jason Calacanis (00:01:15): Alright? You're hot. You're coming in hot? Wow. Breaking news. Breaking news Biden has announced his capital gains tax hike. I don't think this impacts any of us, but Biden will propose almost doubling the capital gains tax rate for wealthy individuals from 20 percent to not 25, not 28, 39.6 percent to help pay for the social spending and in equality. For those earning 1,000,000 or more, so nobody on this call, Federal tax rates could be as high as 43.4 percent. The capital gains increase would raise 300,000,000,000 over a decade. Yadayada. For New Yorkers, the combined state and federal capital gains rate could be as high as 52.22 Percent and Californians 56.7 percent. Biden has previously warned that those earning over 400,000 can expect to pay more in taxes. This was just breaking news a couple of hours before we started the pod, and the stock market is down. and people are freaking Speaker 2 (00:02:25): Well, Jake, I'll do David Sacks (00:02:26): it. Jake, I wanna hear your take on this, actually. Jason Calacanis (00:02:31): didn't you tell me body was gonna do this? I wouldn't David Sacks (00:02:33): vote it for Trump. Speaker 2 (00:02:34): You can't tell Jason Calacanis (00:02:35): me this is gonna hit me so hard. David Sacks (00:02:36): No. Jake Jakeow was ranting on this topic 15 minutes ago, we were talking. And I'm like, dummy, what did you think was gonna happen? You know? He's sitting there going off. He's sitting there going off. It's like, what did you correct. David Friedberg (00:02:49): Just before we get into it, we should do a quick primer on what this means. Right? So capital gains taxes are the taxes you pay when you make an investment and you sell that investment at a profit. that that you pay a tax on the profit you make. And there's a difference between capital gains on the short term, which means less than 1 year, and long term, which means you've had the investment for more than a year. So economic policy historically has dictated that having a low cash capital gains tax rate relative to what, you know, an income tax rate might make might be incentivizes people to make long term investments. and it, you know, gets more money moving in the economy. And as a result, you know, the economy will grow. And so the idea of increasing the long term capital gains tax from 20%, which it currently is to 40% is a real striking, you know, economic policy shift. Rashing lives as, you know, we're gonna save you know, we're gonna use this money for social spending. But I think the historical context and and what this is is really important as we get into the conversation. And just speaking, historically, you know, the the the maximum tax rate on long term capital gains got up to 40% Zach, you probably have the history on this in 1978 for a year. Right? Gotta like Jason Calacanis (00:03:59): 76 David Friedberg (00:04:00): to 78. And then it's been largely, you know, 5th 15 to 20% for the last 20 years or so. And so to jump up yeah. And prior to that, in the early part of the 20th century, it was, like, 25% pretty consistently for a long time. So to jump up to 40%, it's a really big shift, and there's a lot of debate around the economic implications of doing this. I thought that was important. Yeah. Chamath Palihapitiya (00:04:21): Let's take a step back and actually see the forest from the trees. And the forest from the trees is that I don't think Biden thinks that it's a credible plan in as much as I probably think he needs, you know, this is like it's performative because it was a lot larger. The number the headline number was a lot larger. than what people were whispering was gonna be the number. Right? It was supposed to be, like, in the low thirties or maybe kind of like, you know, Jason Calacanis (00:04:53): 33, 34 Chamath Palihapitiya (00:04:55): And then all of a sudden, like, to come out at 39.6, I think it's almost like, okay. He's he's giving the pound of flesh to the the left kind of, like, woke mob of the Democratic party who probably doesn't understand how Calacanis works in the first place and doesn't care because they're not they're not participants in it. Now the my reaction is I don't think it's gonna pass. I think it's gonna be really tough to get done. And I think it probably you know, maybe maybe there's a watered down version, but this version I and and I'm I'm not super worried about. And then it just comes back to the same thing over and over. The the fewer, the number of people that get to participate in the growth and see the upside more there are that just wants to just kind of, you know, tear it all down. And so I don't know. It's just yet another signal that we have these structural issues to fix. It's not reasonable that a few people get super rich and everybody else gets left on the sidelines. Jason Calacanis (00:05:50): Sachs, were you, thus? Chamath Palihapitiya (00:05:51): It's not gonna pass, but it's not gonna pass. Jason Calacanis (00:05:53): not gonna Saks, is it gonna pass? Is it an opening salvo where he wants to get to 32? So he's starting at 39? David Sacks (00:06:00): I think it could I think it could pass because I think they're they're planning to do this tax increase as part of the the second infrastructure bill. It's not really an structure bill. They're calling it human infrastructure. We've talked about this. Infrastructure is one of the last categories of federal spending that's still popular, so they're rebranding a bunch of social programs as human infrastructure. I think that bill will pass. I don't know if the the rate will stay at 39.6, but I think there will be a big increase clearly. in the the cap gains rate. I mean, I think it's worth remembering how it got to 20%. It got to 20% because Bill Clinton lowered it from 28 to 20 as part of an overall package of of of tax reforms that he did in the in the sort of the the mid nineties. And, you know, that led to some of the best years of economic performance, GDP growth in the US, productivity growth. deficit reduction. You know? And so, you know, I think we're we're we're we are experimenting with breaking something been working I think pretty well since the the Reagan Clinton years, which is to have, you know, reasonably low taxes on capital formation and investment. I think it's a category error to treat capital gains or to think about it just as income. You have to remember that all of this money has already been taxed once. Right? So you make the money the first time as income. You earn it. You pay tax on it then you decide to save some of it and then invest it, and then you get taxed again on that amount. And so so capital gains is a form of of double taxation. That was the original reason one of the reasons to to have a different tax rate for it. And, you know, I think that this risk kind of messing up the economic recovery that's really underway already. Chamath Palihapitiya (00:07:51): By the way, think about what just happens to any organization that has to pay cap gains. Right? It's not just individuals. Like, last time I checked organizations aren't exempt from cap gains for profit organizations. And I don't exactly know what they will do as well. So, you know, you you you you're putting a lot of people under a huge train when you double the the the effective rate of return. So, you know, if you're, for example, like, a pension fund, Right? And you have an enormous investment in a private equity fund or a hedge fund. Part of these things is that, you know, they're these complete pass through vehicles. And so as long as like you structured yourself in a way where you don't have to pay that tax, I think I guess you're indifferent. But if you're any organization or institution or a person or a collection of people that bears that tax, all of a sudden, you know, your returns have been basically cut in half. that's pretty nuts. Let's talk about Jason Calacanis (00:08:50): the average Joe for a second or Jane as it were 401 k's. would take a hit here. And then when you go to your retirement and you have to liquidate them -- David Friedberg (00:09:00): No. You don't pay tax on the Jason Calacanis (00:09:01): 401 Speaker 2 (00:09:01): k gains. Jason Calacanis (00:09:02): -- David Friedberg (00:09:02): on that? Yeah. You don't pay tax on the 401 k gains. during your Jason Calacanis (00:09:05): press -- Otherwise, your portfolio, because 401k is gonna be a small amount. You can contribute to you right a year. So retirees who happen to have stock market gains, or cryptocurrency, people trading that. David Friedberg (00:09:15): Yeah. You'll basically pay the same as income tax as opposed to paying a lower tax. Chamath Palihapitiya (00:09:20): So would a It'll diminish investment, Jason. It's exactly what David says which is that on the on a marginal basis, what'll happen is inflation probably goes up because people just decide to consume rather than invest because they think, well, what's the point? There's already risk that I bear. And so, you know, the the earliest risk assets, right, the riskiest ones that we all participate in, which is early stage venture and company formation, There's you you may not be thinking about the capital gains rate, but it's implicit in the returns that you're expecting for the risk and the time you're gonna take. And, you know, we've been trained to feel that rate. And if you double that rate from 20 to 40, I suspect that there's a lot of people whose risk tolerance changes and they're going to feel their after tax gains differently and they'll wonder to themselves Is this worth it? And then I think what happens as a result is entrepreneurship drags. I don't know if anybody's done an analysis, but I suspect part of the reason why America is such a, you know, an amazing, like, sink for capital. Right? It absorbs capital all around the world. is that you've created incentives that get people very excited because they think they can get rewarded. If you take those rewards away, I think the implications are much bigger than just the cap gains rates here. Because as the people change their behavior, then the capital formation pools outside of the United States change their behavior. and the whole thing has a knock on effect. And it was more muted in Clinton. It was less muted in 78. It basically didn't exist in the forties and fifties, but it is a huge force today. I mean, like, we are an indebted nation that owes money to all kinds of countries around the world, including China. We're supposed to generate growth and sort of pay it back. Jason Calacanis (00:10:59): And where will the growth come from if LPs don't wanna back venture funds or venture funds? But let's people say, you know, maybe I'll check out. David Friedberg (00:11:06): Let's be honest and direct. I mean, are any of you guys gonna change your investment behavior if the cap gains tax goes to Jason Calacanis (00:11:13): 40%. David Sacks (00:11:15): No. But there'll be less of it. You know? Yeah. So, look, anything -- Anything Jason Calacanis (00:11:20): -- -- might behavior change. I think my behavior will change. Yeah. Chamath Palihapitiya (00:11:22): How will it change? It's exactly what David said. So I just put in a $100,000,000 into a climate change company 2 weeks ago. Under this promise, I could only put in 50. So there's 50,000,000 less progress that's gonna happen on that business. I'm not sure that that was that's the right answer for what that company is trying to do in the world. Jason Calacanis (00:11:42): And the way David Friedberg (00:11:43): we'll change -- You're saying that you're saying the profits you would have had from before are diminished in half. Therefore, you would only have half as much money to invest as an investor. Chamath Palihapitiya (00:11:51): Right. So so however way you wanna cut it, whether it's like the the 10 companies gets cut down into 5 or the 5 10 companies that I invest in get half my money, The point is at some point, the money starts to run out, not just for me, but for everybody else. David Friedberg (00:12:05): Yeah. Basically, at the end of the day, the money goes into the hands of you know, government legislators and administrators to decide how that money gets spent, and it's not in the hands of capitalist investors to decide where to invest. that that's the fundamental kind of shift that that's gonna happen. David Sacks (00:12:21): Right. Capital capital's been taken out of the acondress capital taken out of the economy and it's gonna now gonna be, you know, spent by by government. Look. And anything that you tax, you punish, and disincentivize, and anything you subsidize, you you've create an incentive for there to be more of. And, you know, so this is just we we we always talk about these things in terms of who they're gonna hurt is it that there are that there's only falls on the backs of rich people, so we shouldn't care. The but the real question is, what is this gonna do to the economy? And, you know, I think we've talked in previous podcast the last part that we have with Brad Gershner, it feels like everything in the American system is kinda broken except for one thing, which is this sort of opportunity economy that's that's been created by risk capital. Right? And and people creating new companies, you know, like these big Stultifying political corporations. The S and P 500 are completely broken. Government's completely broken. The federal debt is out of control. Everything's the media is broken. Everything in America is either broken or needs to be revitalized or reformed except one thing is working really well, which is risk capital and its allocation to founders who have nothing but a good idea. Right? And when all of a sudden you double the cap gains rate, that is an attack on that opportunity society. Now, I think there is a legitimate conversation to be had about how do we spread this sort of system of opportunity to more and more people. I think you like Brad framed it really well in the last episode. Like, how do we get more people involved in that? I would submit the answer has a lot to do with school choice and charter schools giving people everyone in this country deserves to have a 1st rate education. David Sacks (00:13:59): And so that is a very legitimate conversation to have. But I think to have punitive taxation on it, is I think it's at risk breaking that last thing that is working so well in in in the American system. Speaker 2 (00:14:10): I I Jason Calacanis (00:14:10): think it's really well said, and I think this is gonna take redomiciling to another level. I mean, if you're in New York or California right now and you were thinking about Wyoming or Utah or Texas or Florida, I mean, this kinda makes the decision for you if it does go to 40. Chamath Palihapitiya (00:14:28): And because that's Jason Calacanis (00:14:29): -- Let me -- -- actually meet, would you get to neutral if you left? And so I -- Well, I remember Chamath Palihapitiya (00:14:35): I remember when I moved to the United States in 2000, the marginal tax bracket that I was in and I was making maybe you know, a 100. No. I was probably making 80 or $90,000 a year was Jason Calacanis (00:14:49): 55%. Chamath Palihapitiya (00:14:51): And I remember coming to the United States and seeing my after my take home pay, my first paycheck, and I was shocked because I was like, you know, I was paying maybe 36 percent all blended in federal and local at the time in or state at the time in California. And slowly slowly, it's creeping up with with if you've play it out today where we are plus New York States has passed laws. You're going to be sort of in the 50 to 55%, almost upwards of 56% for certain folks And maybe the answer is that's the right thing. But I think we have to acknowledge that there's going to be a bunch of unintended consequences. So maybe the intended consequence is to actually create more equality between the richest few and, you know, not even the poorest frankly because but it'll just be the richest few and the the next richest few, quite honestly, because, like, you know, the investing class is still a small number of people. But the unintended consequences of that decision, I think, is what exactly what David said, which is that over the next 5 or 10 year period, you will at a practical level, see less investment. And the the only way to make that whole is if the government then takes all that money and all of a sudden allocates it from their own coffers back into the economy. And we know that that's not going to happen well. Right? That's just going to be riddled with waste and graft and corruption. So, unfortunately, the setup is that, you know, you're gonna really impact entrepreneurship. And then I and then I wondered to myself, by the way, guys like, What was the actual goal of this? Meaning there was 20 or 30 guys that were just making so much money on their equity But then that's then then we need to blame, like, the these lists, like, the Forbes billionaires list because those are inaccurate because a lot of these stuff is, like, un -- Realized paper gains. Yeah. Right? Chamath Palihapitiya (00:16:37): And so they're not they're not paying any capital gains because they haven't sold anything. And most of these guys that Uber, Uber Rich, you know, have no desire to sell because it's for them, it's a control issue to sell. David Friedberg (00:16:47): I'm not sure the I'm not sure the the the consequence of taxing Uber Rich people is the true motivation. I think for some people, maybe it is. But if we just take a step back, I mean, a year ago, the US debt level was significantly lower than it is today. We've taken on a tremendous amount of of of federal debt to fund a series of programs that we believe we're gonna kinda keep, you know, the American population employed and keep our economy moving. that was a massive burden we accrued in the in the past year. So, ultimately, over time, the only way to kind of support this this new federal budget and, you know, the the this new servicing cost that we've taken on at the government level, you really only have kind of, like, 3 options. Option 1 is you're gonna continue to raise more debt than massively kind of inflate everything and the dollar declines in value. Option Jason Calacanis (00:17:40): 2 David Friedberg (00:17:41): is to reduce spending, which means starting to cut these programs, and option 3 is to raise taxes. And it's pretty clear that 1 is one where we're kind of already at the economic limit. Option 2 is gonna be very hard to swallow at a time like this, so you can't just cut spending right now. across the board, so many aspects of the US economy and so many individuals in the United States are dependent on the federal government for support. And so option 3 is the only real one that's left on the table. And so then the question is who are you taxing? You're not gonna go tax the people that are struggling. you're gonna tax the corporations and the wealthy. And the and the capital gains tax is the one place where you can kind of say, look, tax rate that you're paying today is half of what an income tax rate would be if you were earning that as income, let's get it to be fair and even. And I think just just to argue this other side. Like, there's a motivation. There's a there's a point of view where this is coming from. It's not just let's go tax the rich, screw the economy, it's that we find ourselves in a circumstance where we need to do one of those 3 things. The most rational to do is to or the most kind of sensible politically to do is to is to increase taxation. And this is the the the the first place to go, the most obvious place to go. Chamath Palihapitiya (00:18:50): It's not Because so when you think about, like so for example, like, you know, you would say, okay. Who are the folks that we're talking about? There can be entrepreneurs that are building companies. Again, they're never selling, so they're never gonna pay these taxes. Like, it's not the case that Elon Musk or Mark Zuckerberg is all of a sudden gonna write a $40,000,000,000 check because that's that's not how much they make. That may be how much they're worth. Right. But they will never sell a single share unless they have to to fund some other project, in which case, so which of David Friedberg (00:19:19): those three things would you do tomorrow? Chamath Palihapitiya (00:19:20): So so so what I was gonna say is -- Yeah. So and then and then you look at somebody else, like, maybe you say, oh, well, you know, the people that manage money, like, let's go after those guys because like those guys shouldn't be, you know, rich. But then the problem is those guys are already paying w 2 income. They're already paying nominal income tax rates. That's how the entire hedge fund industry works right now. You know? You get paid in current income. And so Okay. So you're not getting their money because they're already paying at the prevailing rate. So, again, this goes back to if you actually trace the problem and see who it affects It's exactly what David said. It's these folks that are in the middle that are actually putting the money to work, that are trying to invest in things that now have a very different return profile and you're right. the core business that they do they may still keep doing. But then all of the incremental things in the future that they wanna do they won't do. For example, Look at all of the talk right now about how everybody needs to stand up, you know, more angel investing, more minority investing, more women GPs, all of this stuff Well, all of the folks, let's just be honest, all the folks that are in a position to put money into those folks, are now 50% on a dollar rated basis poorer if this thing passes and I bet you what they're gonna do is they're not gonna cut their allocations in Sequoia they're gonna cut their allocations to all these other folks. Jason Calacanis (00:20:36): Yeah. That's exactly what I was thinking, Chamath, is Chamath Palihapitiya (00:20:39): I who's it gonna hurt? It's again, it's gonna hurt all the people that you want to get into the game. It's gonna hurt all the people that are here, but the richest, richest, rich folks that is not -- -- true impact. Jason Calacanis (00:20:48): But fair enough. -- Chamath Palihapitiya (00:20:49): you ex appropriate the money from them, that's not you're not gonna get a single Jason Calacanis (00:20:53): And then that was the that was the concept of the wealth tax. Wasn't it that you would take the total value what you have and just take away 1% a year from Bezos's, you know, or Zuckerberg's $100,000,000,000. So would that not have been a better solution than this if you had to pick 1, a 1% well attached? Chamath Palihapitiya (00:21:09): That's that's the people for whatever reason. Then then we're no better than a Banana Republic that could also then expropriate a mine because we don't like the way that the mining is happening or, you know, another critical asset because the government decides that it's important. I mean, what's the difference between a stock and any other asset that either a person or or or corporation owns? It's it's it's very I think that the definitions are thin. They're all the same things at the end of David Friedberg (00:21:33): the day. So -- Let's go back let's go back to the federal budget problem. Like, how do you address it? Sachs. I mean, what's the right course here? David Sacks (00:21:39): What I think is amazing is we're we're about to spend we're raising this hundreds of billions of taxes in order to fund, you know, 1,000,000,000,000 of of new spending. I don't really hear the administration selling these new programs, selling the spending. all we're really talking about is that there's too many rich people, you know, we have these millionaires and billionaires. We gotta attack some more. And so all all we're really talking about is whether it's appropriate to punishing the the rich and super rich. We're not really talking about where is this money going? Are these programs justified? Where do we get out of it? Exactly. And my point is forget about, like, who it's gonna hurt. I think it's eventually gonna hurt the economy. And the question is, what do we get out of it? And I think what's amazing is This isn't even paying for the big ticket items on the Progressive Wish list. We're not getting to universal health care with this. We're not getting to universal higher education. We're not getting to any other we're not getting to, like, forgiveness of of student loans or anything like that. We're not getting to any of the really big take at items on the progressive wish list, and yet we're maxing out the taxes relative to anything we've done historically. And so where do you go from here? You know? Because Jason Calacanis (00:22:48): my thinking Speaker 2 (00:22:48): is -- This is just this is just the tip David Sacks (00:22:50): of the iceberg in terms of of the progressive agenda. David Friedberg (00:22:52): Doesn't that speak to the problem? Like, the fact that we have such an extraordinarily high debt burden and federal budget that we're kind of scrambling to figure out a way to kinda make ends meet effectively. Right? I mean, because our alternative, again, is to just let massive inflation run, you know, issue a ton of a ton of new debt or to cut spending. Chamath Palihapitiya (00:23:12): No. No. No. But, David Jason Calacanis (00:23:13): -- David Friedberg (00:23:13): But either of those seem to be on the table. Chamath Palihapitiya (00:23:15): No. No. No. You're going to exacerbate this issue. I'm I'm telling you, I know it doesn't seem likely but I think on a marginal basis this will be an incentive to spend. And the reason is that it's a very frustrating idea for somebody to think about putting money in the ground especially a sophisticated investor at a rate of return that just changed in half. I would be more likely to spend because I would rather just yolo the money than I would rather put it into the ground because I would be worried that that could then get taken away from me. It could also change even further and further, and that I think that's a very frustrating idea. I'd rather take a vacation. Again, let's go back to the I'd rather take a vacation with that Jason Calacanis (00:23:55): $10,000, Chamath Palihapitiya (00:23:57): then go on to Jason syndicate and put it into the hands of folks because I'm just like, you know what? gonna turn into even if even if Jason hits it and I get back, you know, I'd rather just go on vacation. Enough of those decisions and I think I think you have a very different kind of economy. You have you know what you have. You have what everybody else has. David Friedberg (00:24:14): So do we reduce spending? Chamath Palihapitiya (00:24:16): I think you have to reduce expenses. I think that we have an infrastructure that is not well accounted for. Meaning, if you're a company, you can go to a company like Tableau. You can go to a company like, you know, pick your pick your metrics company. And within, you know, a few weeks months of work, you can literally understand where all the dollars are. Right? You can understand your business and you can figure out where money is being wasted and where it's not. In a government that's impossible to do. Right? Because you have these laws and these laws are artificial constructs that we construct and those artificial constructs aren't influenced by money in and of itself. And so these dollar flows are impossible to map so you don't know where it goes. So for example, The $700,000,000,000 budget in the Pentagon, does anybody have any idea what the ROI is on that or even a way to measure it? Like, even to actually make it simple. Well, like, if you were if you had $700,000,000,000 of investment capital, the the market has a really simple way of saying, okay, David. What's your ROIC? What's your return on invested capital? And you can say all kinds of fancy things. You can have all kinds of fancy projects or simple projects, but at the end of the day, What is measurable is your dollar in and what that dollar grew into, and that's a return on invested capital. It is impossible to know that And so, you know, we could say, for example, you could define it and say, well, I'm going to basically get every single person to graduate high school. And now I'm gonna spend $500,000,000,000 a year to make sure that the graduation rate is 100%. That would be an incredible goal. You know what? That is absolutely measurable. Right? And and you'd be able to back into all of these programs and the one that's ones that didn't work, you'd cut, you know, and you'd end up with what David said, which is school vouchers. Chamath Palihapitiya (00:25:58): I mean, just ignore. Speaker 2 (00:25:59): I think David Friedberg (00:25:59): I think the absence of that accountability, Chamath has led us to a a a scary dilemma. And the dilemma is over 10,000,000 Americans are directly employed by federal government, and a large swath of the remainder of the economy is supported by federal government spending Jason Calacanis (00:26:15): -- Which is basically your point. David Friedberg (00:26:17): Right? So lar large amounts defense and military, construction, healthcare and pharma, I mean, the list goes on, but, like, the direct employees of the federal government plus the amount of revenue that depends on federal spending is so significant now. as a percent of the total income generated by Americans, that it is very hard to say, like, let's create accountability in a system when so much of the economy is functionally dependent on it. Am I missing something, Saxx? Like, I mean, isn't that the circumstance we're in right now? David Sacks (00:26:44): Yeah. I mean, the thing that, like, is amazing to me is, you know, I live through the 19 eighties 19 nineties. Like, like you guys did. From Jason Calacanis (00:26:51): 1982 David Sacks (00:26:52): to 2000, that 18 year period, we had sort of an unrivaled economic performance. It was roughly around we had 2 bad years under George Herbert Walker Bush. That's why he lost reelection. But we had close to 4% growth in GDP Every year, we had great productivity, and we had massive deficit reduction. It's the last 4 -- -- 4% a Jason Calacanis (00:27:15): year. GDC? David Sacks (00:27:16): And we and we had we we actually had government's surplus budget surpluses the last few years. So it seems to me that we had the winning formula as a country. And at look. This is not partisan. I think it's bipartisan. I think it the the this right solution is somewhere between what what Reagan and and Bill Clinton did. And, you know, Clinton, he rose he increased the individual tax rate to 39.6. So he did do that from 36%. But he cut it from he cut the investment the cap gains rate from 28 to 20. It was in that ballpark. You know, we know that works. You know, we know that works. I and and and, you know, somehow we've moved away from what we learned in that time period because, you know, I think the the the left in this country has has become kind of, you know, has embraced this Chamath Palihapitiya (00:28:05): We're saying the same thing. You set up the incentives for people to invest. They do. If you set up the incentives for people to spend, they will do that as well. Jason Calacanis (00:28:14): I I see this, I think Tremont is exactly right. There are a lot of people, and you use the example of the syndicate .com. When I do my syndicate deals, there are people who are recreationally saying, you know what? I love the idea of putting 5 or 10 k into a flyer. They're gonna you know, half of them will go away, a third of them. all these people who are, you know, involved in day trading or crypto or real estate investing, they're gonna look at it and say, is this worth the time Or is it worth this amount of time? Maybe I'll cut back from doing 40 hours a week of this to 20. And if you look at what happened with crypto people, they went to Puerto Rico. You look what happened to Venture since CEOs. They went to Florida, Miami, Austin. This is gonna if it does pass you could be pushing people to Singapore Chamath Palihapitiya (00:28:55): Well, we have another very complicated problem, and this is what Friedberg brought up, which is and I don't know the answer, David. So I'm I'm trying to I'm actually talking around your question because I I think it's a it's it's the right absolute question. But think about this. What happens in a world where now let's just say that the revenue of the government goes up Right? But outcomes stay the same or get worse. And at the same time and and you could claim that that's effectively what's been happening over the last 20 or 30 years. Right? Government revenues have gone up, impact to stay the same or probably been net negative. But then at the same time, you have this, you know, program of quantitative easing where then you can essentially print money on demand. And when you think about that it's like, wait a minute, I am giving you money But then then you are also going to the photocopy machine with my money to make more money and all of that total money does less than what it did when it was half that or a quarter or a third of it, that's a very scary realization I think that people, you know, will eventually come to. and I don't know what the answer to that is. I, you know, I I I think David Saksipoo said it, which is like, you know, the states are this incredible a b test. Right? Because you get to test, like, theories Right? And you have you have now every complexion of theory. You have, like, you know, the low tax states, the no tax states, the mid tax states, you have high real estate tax is low real estate taxes, highest state tax, whatever. You get every grab bag of incentives, and you're gonna see. But the problem is that was assuming that the federal government kind of mostly stayed out of the way. Would you David Friedberg (00:30:22): would you have this massive overlay? David Sacks (00:30:24): Yeah. I just posted a chart in the the chat that Nick can put up, which is federal spending. Federal outlays a percentage of GDP. And it's really interesting because federal outlays of percent of GDP have generally been around the 20% line plus or minus a couple of percent. since, you know, the 19 eighties. And last year, in 2019, it was 20.7%. It jumped to Jason Calacanis (00:30:48): 31 0.3% David Sacks (00:30:50): under COVID. And it now feels like we're trying to make this new level of, you know, going from 20 to 30 permanent. David Friedberg (00:30:58): It's like mask mask wearing. Well, the Chamath Palihapitiya (00:31:00): the pro the problem is the only time we did that in history was in World War 2. Now we were trying to fight the Nazis, which was worth spending the money on. Jason Calacanis (00:31:07): I would say that was a good use of capital. David Friedberg (00:31:09): But it's very hard to step back. Right? Speaker 2 (00:31:10): I mean, Jason Calacanis (00:31:11): once -- -- to ruin. David Friedberg (00:31:11): What what starts out as temporary becomes permanent? Is that kind of a concern? David Sacks (00:31:15): Well, that's what that's what Milton Freeman said is there's nothing quite so permanent as a temporary government program. Right. But but but what but what they're threatening to make permanent is this new permanently higher level federal spending in the economy. And I think it's a very dangerous experiment because it either takes tremendous money printing to support it or a tremendous tax burden, and neither one of them is good for the economy. By the way, you know, again, when Bill Clinton left office, I remember, you know, you can go to the the the time machine for White House dotgov when he left in 2000, and he bragged about how, under his terms, under his 8 years as president, they reduce federal spending from Jason Calacanis (00:31:52): 22% -- And what's happened to that? -- David Sacks (00:31:55): to 18% of the economy. Can you imagine a Democrat today boasting of that? Jason Calacanis (00:31:59): or even a Republican. I mean, what what who was the guy who was your guy who was, like, the tea party people who there was somebody who was, like, in charge of The set -- -- call. -- ran oh, I don't know who it was, but it was just like, we gotta cut spending. The -- David Sacks (00:32:13): Oh, yeah. Ryan. Yeah. Speaker the the the speaker of the house, Paul Ryan. Yeah. Speaker 2 (00:32:18): Paul Ryan? David Sacks (00:32:18): No. You're right. You're right. Chamath Palihapitiya (00:32:19): He did based on miss it. David Sacks (00:32:20): Yes. Spending spending restraints kinda gone out the window in in both parties, and we were public and it it did it did happen under Trump. The Republicans don't seem to find their principles on spending unless and until there's a Democrat in the White House. So they definitely deserve their share of the blame on this. But but we do seem to be entering a new territory here of, you know, this again, levels of spending we've never seen before. Chamath Palihapitiya (00:32:43): It's incredible. Absolutely. The the problem is it would be so much better if we just said we're gonna do this one very specific thing with a huge number attached to it. Like, I would rather say, We're going to Mars. Here's a Jason Calacanis (00:32:56): $1,000,000,000,000. Chamath Palihapitiya (00:32:57): We're cutting student debt. Here's a $1,000,000,000,000. We're going to double down on cyber, and we're gonna get, you know, completely pivot the military or something and choose $500,000,000. -- new deal, whatever. Jason Calacanis (00:33:08): Something aspirational. that is not just anti rich people. Let's tax David Friedberg (00:33:12): the rules. Chamath Palihapitiya (00:33:13): We have we have labels. We have a label, and then we have a spaghetti mess of spending that just isn't really attached to what the label means, and none of it is accountable, and so you don't really get anything for it. Jason Calacanis (00:33:24): I I know this is a silly question, but why wouldn't we test this and say, hey. 20, 40, there are numbers between these 2. Maybe we'll increase it 2% a year for 8 years, and we'll see what happens. Chamath Palihapitiya (00:33:39): This is the this is the other problem with, like, this idea of American Exceptionalism. We believe that we can't learn anything from anybody else that's also not true. We actually know what it looks like when you have government as a massive portion of the economy. When we also know examples where government basically enables human capital outcomes, but remains relatively, you know, small and fixed. Singapore. Right? The the there's this there's incredible Yeah. You know, there's this incredible example where I think Redwin Lee Kuan Yu became the head of Singapore. The GDP of Singapore was the same as the GDP of Jamaica. Right? And what you saw was this complete, just just complete divergence in in these two countries And think about this country, which is basically this, like, you know, this little spot of land surrounded, you know, And, you know, apolitical, a religious surrounded by these Muslim countries, and they still thrived and they kicked ass. You know, they were never invaded, etcetera, etcetera. And underneath that was this belief that it's what you said, Friedberg, where you focus on an outcome, you spend against the outcome, and you try to measure in a reasonable way. and you double down on the things that work. And then on the other hand, if you look at Europe, Europe is a good example when spending sometimes for the greater good in the best interest can run amok. And, really, what happens is you start to stagnate. Jason Calacanis (00:34:59): Mhmm. Yeah. And Singapore is only what? Six million people. I mean, it's like Ireland or Norway or Denmark. I mean, it's this is not a huge place. David Friedberg (00:35:06): Sounds like we didn't solve any problems in that last piece. Jason Calacanis (00:35:09): Yeah. We didn't solve it. But, I mean, I mean, what do we think is gonna happen in 4 years? Does Donald Trump a clear path into office if he said, hey. We're all lower taxes again? David Friedberg (00:35:18): You know, the worst case scenario is you see what happened in France when they had that 75% Super tax, and then they introduced the wealth tax, and they had massive them immigration of of invested dollars out of the country and people the country. Jason Calacanis (00:35:30): They did get rid of George, didn't David Friedberg (00:35:31): think or did. Jason Calacanis (00:35:32): That was a bonus. He went to a bonus. David Sacks (00:35:34): Yeah. Yeah. What point, how many red pills do you guys have to take before you're willing to reassess your political party? Because it seems obvious to me. Now look, we could about how bad A David Friedberg (00:35:45): political party, do you think Speaker 2 (00:35:46): we're all Hold on. Hold on. We can talk about we David Sacks (00:35:48): can talk about how bad the Republican party is, but there's no question in my mind that the Democratic party, all the energy, the base, the activists and the politicians who have the microphone, they are woke socialists. Okay? That is the dominant ideology in the Democratic Party. And what Biden is doing right now is catering to that. He's compromising that. Jason Calacanis (00:36:06): He wasn't catering debt to that until this point. He he didn't put Bernie or Elizabeth Warren into any cabinet positions. He kinda marginalized them, and now he's like, okay. Let's do this something. I mean, would Warren and Chamath Palihapitiya (00:36:18): this is This is why I think -- Yeah. No. But j Jason, I think you're right. This is why I think this is like a sacrificial lamb, and I don't think anything's gonna happen. I don't I think Biden is a fundamental centrist. That's why I like him. I think he's a -- Boring. He's a stable he's a stable predictable figure, and that's, I think, what you want in the in the presidency. I I think that this is sort of like, okay. You guys want a pound of flesh. Here you go. But I think he's so politically smart that he probably does have a bunch of millennial woke socialist whispering and chattering like, hey. Do this. Do that to the other. But he's probably the only one there who's smart enough to realize none of this won't get passed. you know, it's not gonna muster enough support. I don't Speaker 2 (00:36:55): know. David Friedberg (00:36:55): I think I Biden David Sacks (00:36:56): is not governing like a centrist right now. He's he's proposing, you know, what, $4,000,000,000,000,000 of new spending. you know, new tax increases, and he's just getting started. But look, and I I would challenge this idea to slightly of him being a centrist. What I would say is, He's always tact to the center of the Democratic Party. So I I do it I I I do think he's he's a triangulate triangulator and a calibrator. He's not like a conviction politician the way that Bernie Sanders is or an Elizabeth Warren. But what he's talked to is the center of the Democratic Party. And the center of the Democratic Party has moved very far left because all the activists have moved to the left. And so he's been dragged left. Remember, Biden was Clinton's floor manager in the Senate when he passed all all this legislation. And so now Biden is very far to the left of where Biden was in the 19 nineties. And the reason for that is because the democratic party has moved. So once again, I guess, you know, my question to all of you guys is, What does it take? How far does the democratic party have to go to the left? Jason Calacanis (00:37:54): -- Chamath Palihapitiya (00:37:54): Donald Trump. Not Donald Trump. David Friedberg (00:37:55): I would I wouldn't I I wouldn't Speaker 2 (00:37:57): call this -- That's Jason Calacanis (00:37:57): the problem, is Don -- I David Friedberg (00:37:58): wouldn't call this as much of a radical policy shift as I think it's being framed. I honestly think this is a natural and inevitable con sequence of the circumstances we find ourselves in right now with respect to the spending level, the dependence we have on federal spending across the board with respect to individual employment and the economy, the need for a variety of social services to get us through this COVID economic collapse. I I just don't see another way out, and I feel like it's the natural course to do exactly what's going on right now. I I think it's gonna pass. I think something like it's gonna pass. And -- I Chamath Palihapitiya (00:38:29): think something like it's gonna pass, but I don't think it's gonna pass. Speaker 2 (00:38:32): Yeah. Where do you Jason Calacanis (00:38:33): put it at? You think it's gonna be equidism? David Friedberg (00:38:34): I'm not saying I'm not saying it's good or bad. I think obviously, we just find ourselves in this circumstance in this country in this moment in time that this is the only path. I'm just not sure you can go in and go slash a ton of spending right now. And and, you know, and anyone would win reelection or any you know, or most Americans would be anything but unhappy. It's just the just the consequence of where we are. Chamath Palihapitiya (00:38:55): Let's play the glass half full. Here's a crazy idea. Okay? You know, for example, somebody like me, what I would think about, which I think is is a little it's crazy, but I would do it. is okay. I'm just gonna move literally every single thing, every dollar that isn't nailed down. into a charitable vehicle, and I will invest through my charity because I still have to donate 5% a year, but then I can compound tax free. Now I care more about the businesses that I'm a part of and the progress that I can create, so that may be okay, and I'll just pay myself a salaried to, like, fund my lifestyle. but that could be a way around this. To me, the biggest issue isn't how much money I have, personally. The biggest issue is how much money I will have to put back into the world. And the idea that then it goes to a place where it's profitably spent in a way that isn't accountable really bothers me. That idea bothers me a lot. David, that would cause me to attack you know, even more to the right if I could find somebody who understood that principle. Because what I don't wanna have is, you know, in the sense of social programs, like, the the the problem that the Republicans leave is this no man's land where then you're forced to believe that this one man for yourself all about you. You can figure it out, you know, the rugged individualism. That's just not realistic like I I am a complete byproduct of a social safety net, and that should exist. And the problem is that Republicans don't give you that option to have then accountability on spending. And Just somebody please just say that. I don't care what you call yourself. David Sacks (00:40:26): Yeah. Well, look. I think, you know, the I think Republicans have gotten a lot comfortable with the idea of entitlements and the the social safety net. I don't really hear anyone opposing that anymore. I mean, it's the same things happened with like, the Torys in in England, you know, no no one's really trying to roll back the social safety net. We need a Republican investor to come forward and say, listen. We don't care, you know, who you love, what you smoke, where you're from, what you look like, You know, we believe in an opportunity society, we wanna spread that opportunity to everybody, but ultimately opportunity comes from the private sector. We're gonna have a strong social safety net. And we're gonna basically give everybody the the most opportunity to participate by giving them a great education. That's basically what the agendas should be. Jason Calacanis (00:41:12): Yeah. I'm in. I'm in. I mean, I I to your point -- -- starting line. Hallelujah. I like it. I mean, I I would Chamath Palihapitiya (00:41:18): I feel bad. -- your boy tried to dismantle Obamacare. You know? Unfortunately -- -- is Trump. Like, Trump I'm Jason Calacanis (00:41:24): a never Trumper, obviously, but I I'm kinda purple. I would you know, I'm considering Austin or Miami as a as a place to locate myself. And so I just like this makes it easier. Chamath Palihapitiya (00:41:33): I would never do that. Jason Calacanis (00:41:35): I'm actually I I love Texas. I love Austin. Austin's the kind of purple I like. Like, I like personal Friedberg, and I like what you're saying. Like, love who you love, smoke what you want. David Friedberg (00:41:46): What year did you move to the Bay Area? Jason Calacanis (00:41:48): 5, 6 years ago? I was in LA for 10 New York for 30. David Friedberg (00:41:52): I feel like it's a last in first out thing that's going on right now with respect to immigration out of California. Chamath Palihapitiya (00:41:57): I've been here since 2000. I'm not leaving. David Friedberg (00:41:59): Yeah. I've been here at my since I was six years old in California, and I'm not leaving. And I and I've been in the Bay Area since college, so I'm not know, I feel like it's a lot harder to leave when you've been here longer. It's a lot easier to leave when you've been here less time. That certainly seems to be the pattern I've seen amongst friends and colleagues. with respect to leaving the state. Jason Calacanis (00:42:16): Alright. The Chauvin trial came back guilty all three charges. David Friedberg (00:42:23): What is there to even talk about here? What is there to talk about? Jason Calacanis (00:42:25): I don't I don't even know. I mean, I feel like we should like -- Chamath Palihapitiya (00:42:28): Why? Can I can I give it can I give a shout out to a really good friend of mine. His name is Neil Cachal. He was the former solicitor general under Obama. Mhmm. He, yeah, he was one of the prosecutors that that worked on that case. He's a he's a partner at Hogan's, runs a supreme court practice here, but basically went and did this pro boner trial on on behalf of the state of Minnesota. I'm working with the the the district journey, and I just I just wanna say, Neil, proud of you. It's an incredible thing. Thank you for keeping America safe. Yeah. I mean, you know, it's crazy. It's -- -- a lot. It's -- So, like, But then, you know, the same day, there was there was a shooting of this the this unfortunate shooting of this I think I think she was sixteen year old sixteen years old. This black girl in Ohio, and then, you know, LeBron tweeted something out. And then LeBron had to basically delete the tweet because it was causing people to go absolutely crazy. Jason Calacanis (00:43:23): Well, I mean, each of these situations is unique. And in that situation, somebody was gonna stab another person. The cop didn't know what was gonna happen and you know, in a in another time period, like, maybe that would have been saving somebody's life who had potentially been stabbed and you know, the the George Floyd I I think you had a reserve judgment on each of these until you get all the information, but the information here was just super conclusive. Like, I the the the gymnastics Ben Shapiro and some of these far right people had to go through to say what you saw in George Floyd being murdered was not what happened? Chamath Palihapitiya (00:43:58): Well, that's that's performative theater trying to get people to something. Jason Calacanis (00:44:01): And it was, I mean, it was just gross to watch like -- -- call Chamath Palihapitiya (00:44:04): it what it is. Like, that's acting. I feel like probably if if anybody if any one of us found Ben Shapiro in a bar and just hung out and had a beer, you'd find out that he was like he was like the meryl streep of our generation. You know, like this incredible actor -- What David Friedberg (00:44:16): does that mean? It's like an incredible actor. Jason Calacanis (00:44:19): I mean, they're I think Scott Adams and his pockets. All these guys are just trying to figure out how to say that this was a travesty of justice. And I'm like, I I don't know what you saw, but -- David Sacks (00:44:30): Yeah. Let let me explain where they went wrong. Okay? So So, look, I I I agree with you guys fundamentally. This was an easy look. This this was, you know, a finding a fact by the jury, guilty on all charges. obvious. Right? The tape shows it. His the Chauvin's record as a cop, numerous complaints. You know, this was a bad apple. This was a bad cop, he deserved to be convicted, end of story. That's really the analysis should end. But of course, the people on cable news would have nothing to say if that was the end of it. And so look. I think both the right and the left kinda went off the rails on this where, you know, the right kinda went off the rails is you had well, What happened is you had Maxine Waters, you know, come out. And while the the jury was still deliberating, she was basically calling for activists to get more confrontational on the streets if the verdict went the wrong way. And so then the defense -- Not Jason Calacanis (00:45:23): helpful. -- David Sacks (00:45:24): not helpful. Right? And so the so then the the defense made a motion saying that this this was affecting the deliberations. There's no proof for that. The jewel the the judge ruled against that motion, but he did the judge reiterated his desire for the politicians to stop talking about the case. Right? And so then what happened is the the right wing commentators were criticizing Maxine Waters and implying that that there was an effort to try and coerce the jury and there's no proof of that. Right? And and and and I think there's the mistake isn't somehow framing the Derek Chauvin as, like, a sacrificial lamb to the mob. He was not He was guilty. He deserved it. That being said, I do think that the judge had a point that it'd be helpful if these politicians would just stay out of it. stop commenting on it while the jury is deliberating. I think there was a legit point there. But, you know, the the the the left made some some weird comments as well. You had Nancy Pelosi made this really bizarre statement. Jason Calacanis (00:46:26): -- very strange. I think that was, like, a slip up of, like, just trying to say something not I mean, being charitable, she was trying to say something nice that George Floyd is gonna create a wave of justice, and that would be that's a great idea. Speaker 2 (00:46:40): But -- Yeah. She said thank David Sacks (00:46:41): you, George Floyd, for sacrificing your life for for justice. Jason Calacanis (00:46:44): Yeah. It didn't come out exactly as she Speaker 2 (00:46:46): ended up. David Sacks (00:46:46): No. No. I mean, because look. George Floyd did not go out that day and tending to be a part. No. No. You know? And and so it it it sort of gay it it expressed kind of what she's thinking, which is how am I gonna use this politically? You know? Yeah. Speaker 2 (00:47:03): That's how Jason Calacanis (00:47:03): they think they're trained. David Sacks (00:47:05): It came out pretty gross. Right? Jason Calacanis (00:47:07): It came out gross for sure. Chamath Palihapitiya (00:47:08): I think that's how they're trained. It's kind of like, you know, if you if you take a finely tuned athlete into sport and give them you know, they're they just they're reactive because they're so instinctual. I think it's kind of like this. She's an incredibly finely trained athlete in her domain is politics. And so, you know, what what is that phrase? Every crisis is an opportunity kind of thing. So I think -- Yeah. Jason Calacanis (00:47:29): I mean, they all flew there to be there for the for the trial, etcetera. And that couldn't have helped the judge with, you know, the impartial jury. And maybe that causes a miss I mean, I don't know, David, you're an attorney. Is there any chance on appeal that a maxi water quote like that could result in -- David Sacks (00:47:48): Well, the judge the judge actually said that that the the defense could reserve that issue and use it on appeal. So, yeah, they could use it. But but I don't think it's I don't think it's gonna work unless they can prove that somehow the jury was contaminated by what they were hearing on TV or Speaker 2 (00:48:04): something like that. Chamath Palihapitiya (00:48:04): The judges instructions were pretty clear. Like, I I watched a couple of the ending days, and he's very like, he's like, guys, I don't want you to watch the news, you know, and stuff like that. He was very directive in making sure that they tried to be as uncontaminated as possible. So I think the The surface area for an appeal is pretty thin here. Jason Calacanis (00:48:19): The fact that the police chief and everybody who worked with him said, like, this is not standard. This and they just threw him right under the bus. They didn't wanna be associated with this in any way. David Friedberg (00:48:29): By the way, well, Chamath Palihapitiya (00:48:29): you know, they're they're not gonna be able to hide much longer, though. because the DOJ said they're opening an investigation at the Minnesota police force. So I think they're just trying to crack open the police reform in that state and just kept those guys on the right side and it's gonna be you know? But, again, here's this other issue where it's like, okay. this is where, like, there it's very difficult for the federal government to do anything, but you know? So whatever they try to do won't really result in what what you want to have because Every state again, Jason, to your point, has completely different political ideologies. Nobody wants to behave the same. Everybody wants to be independent. Everybody wants to get reelected as not cow towing to somebody else. And so you just don't get these consistent outcomes and then people are forced to vote with their feet and move across the country You know, to get a bunch of simple things that I think should be pretty consistent across the entire country. The Jason Calacanis (00:49:16): thing that I found -- Just Speaker 2 (00:49:17): not a problem. Jason Calacanis (00:49:17): -- particularly deranged was these people who are like, listen. He's a fentanyl addict. He's an opioid addict. which by the way, there are tons of affluent people. Everybody in this country is addicted to opioids. Fentanyls are everywhere. fentanyl is everywhere. And then you're trying to say, like, because he had that addiction that in some way that negates the person kneeling on his back while he's in handcuffs, Like, you're you have a duty as a police officer to take care of somebody when he's in handcuffs. How is he any threat in any way and then to listen to Scott Adams and Ben Shapiro on these absolute pieces of garbage, try to say, oh, you know, there was a fentanyl that killed him. It's like, Yeah. No. The person on his back kneeling on him for 9 minutes -- Chamath Palihapitiya (00:49:59): Because it's about it's about ratings. Now switching topics and to talk about ratings, something a little lighter The most interesting popcorn thing that I watched was the Hulu documentary. Jason Calacanis (00:50:11): You did watch the Hulu documentary on WeWork? David Friedberg (00:50:13): I'll be working on it. I gotta watch it. I gotta watch it. David Sacks (00:50:16): I haven't seen it yet. Chamath Palihapitiya (00:50:17): Yeah. Oh. It is it is in a word. I think I think the good I think the right word is, like, outrageous. I think the guy who stole it, Jason, was the lawyer who they interviewed. Yep. He he had some incredible kind of like minors. Yeah. Well, I think it's Jason Calacanis (00:50:31): yeah. The the -- I had a Chamath Palihapitiya (00:50:33): gee I I'll I'll be honest, and this may sound crazy, but I actually had a fair amount of sympathy for Adam Newman in watching it. I think that he at least in the documentary, it came out that he you know, not not that he didn't create this issue, but that I think it was a little overly scapegoated because it's very hard for you to incinerate $45,000,000,000 without the complicity at a minimum of your board of directors. Right? And and a bunch of, like, extremely well heeled thoughtful investors. And so there was just there was just this so much complicity in this thing. So if anything, my takeaway was that he he shares he shares the blame with a lot of other people, and it's not it wasn't you know, him and him only. But my gosh, that documentary, some of the things guys are just they're fabulous. David Friedberg (00:51:18): This is this is always true in these businesses that end up with you know, bad actors that are enabled. Right? I mean, it's been the case in public and public success stories and failures. Right? I mean, there's a a cult of Palihapitiya, the personality provides the the the high beta personality provides the alpha, and it can also pro it can also can provide, like, a Theranos outcome and, you know, the -- But Jason Calacanis (00:51:43): the thing that when you'll see when you watch this is I don't know if you guys watch the vow about that Nxium cult, which is just Equally, loathsome horrible people behaving badly. But he really targeted young people to work there and indoctrinated him into this. We're changing the world And then there were no adults there, and you see him behind the scenes when he's talking at the IPO roadshow, and he's having basically a panic attack. and he's psychotic. I mean, he was really deranged, and they have this video of him trying to get through the IPO roadshow. David Friedberg (00:52:16): What show is the world movie is this? Jason Calacanis (00:52:18): It it's the WeWork Documentary. WeWork Documentary. Chamath Palihapitiya (00:52:20): Just get Hulu. It's not Hulu. Yeah. Jason Calacanis (00:52:22): It is so deranged. It's awesome. I mean, it's not Chamath Palihapitiya (00:52:26): our festival. lever? Darranged is a big word. I don't I'm not sure that it's deranged, but I think it's, like, it's juicy. It's it's gospel. Jason Calacanis (00:52:34): And, like, that whole thing, like, we school, They're like, we have to democratize education David Friedberg (00:52:40): for 60,000 a year. Have you guys have you guys ever have you guys ever regretted enabling you know, quirky personality entrepreneurs that you've backed and then you've regretted it later? Chamath Palihapitiya (00:52:50): Yeah. So the the problem is it's it's hard to know in the midst of You know? I guess it's, like, kind of like that line. Like, the line between genius and insanity is very thin. But, yeah, I mean, the the one thing I will say is I've only ever had one issue of outright fraud. And so, you know, in Jason Calacanis (00:53:08): -- Chamath Palihapitiya (00:53:08): Do tell. Well, no. I mean, in in hundreds of in hundreds of companies that that I've that I've invested in, luckily, I I've I've only I've only seen one issue where you know, the CEO was extremely, I don't know, aggressive in how they accounted for and booked revenue and This is where one thing that we don't have at the early stage companies, we don't have the check-in balance of a reporting infrastructure and a third party watchdog and all these other people. And so You know, you guys all know this. When we go in and we sit in a meeting in a board meeting and, you know, the entrepreneur put slides up, there is an inherent 100 percent categorical belief that they're that they aren't lying. Right? Like, you don't you don't even have to check that assumption. It's just assumed that nobody's lying. You know, good or bad were just presenting the data, and I had one case where the guy lied. and it wasn't one was was. And our CFO and, you know, our team figured it out and, you know, there were other investors, and it was we all were just really shocked and we had to kind of clean it up as best we could. And Jason Calacanis (00:54:13): I have literally a dozen and they we didn't wind up investing in, I think, 10 of the 12. And the reason is we took diligence to your point, Shamalff, like, do you how do you even know in a board meeting? I just said, screw it. I'm gonna build a diligence team, and we ask people for all their bank statements and for their iTunes account and for their Google Analytics. And if a company doesn't give those to us, we just know that something's up. And we figure it out before we invest because the two times we did get dinged on this, we had one where somebody was giving themselves a loan and David Friedberg (00:54:46): pay -- -- diligence? Jason Calacanis (00:54:47): We did we we've just based on a diligence list that says give the incorporation docs and all these bank statements. Now somebody could fraudulently change a bank statement. That is possible. So they're depends on how people wanna go to the fraud. David Friedberg (00:55:00): But did you guys ever, like, enable a personality that was just, like, so over the top and then you're like, oh, shit. This is actually gonna this is actually an explosion. Like, it's a total disaster. Only my top 3 investments. Right? I mean, that's like -- Well, David Sacks (00:55:13): actually, that's a good point there. Speaker 2 (00:55:14): It's a David Friedberg (00:55:15): good point. like. David Sacks (00:55:15): Yeah. So because okay. So I wrote about this in my blog post blitz fail about the the sort of how -- Yeah. Jason Calacanis (00:55:21): -- David Sacks (00:55:21): how founder psychology can actually cause a company to go off the rails. Jason Calacanis (00:55:24): whose benefits? Speaker 2 (00:55:26): The the the thing the David Sacks (00:55:27): thing is that founder founders do need to be much more aggressive than the person. You know, we like to think that a quality that a personality trait like aggressiveness, there's like some sort of normal distribution of it and you kinda wanna be, you know, somewhere in the middle of the curve. And it's actually not true. You want founders to be much more aggressive than the average person Because if they're not, they're just not gonna persevere and push hard enough. Right? And, Jake, I mean, we saw this with with Uber. Right? I mean, t k was a super aggressive personality. the company would not have been as successful. How do you not push that hard? And so the curve in the real world, it's not a normal distribution. It more looks more like a curve where there are returns to aggressiveness, and they're keeping increasing returns to it until suddenly the person goes too far, and then they jump the shark and the whole thing craters Jason Calacanis (00:56:15): and crashes. Chamath Palihapitiya (00:56:15): Can I can I say something? like, you know, having been in the engine room with Zuck in a critical moment, Zuck was an aggressive guy, but he wasn't over the top and he wasn't just this, like, crazy weirdo personality. He wasn't enabling sexual harassment. He wasn't doing any of that stuff. Jason Calacanis (00:56:31): What'd you say? Chamath Palihapitiya (00:56:32): Yeah. was he was an he was he was an intellectually incisive. He was an aggressive thinker. So -- Right. Jason Calacanis (00:56:38): -- Chamath Palihapitiya (00:56:38): this is why my reaction to David's question is, I haven't backed assholes because I just think that that archetype doesn't work. David Sacks (00:56:44): Azak is a very cool analytical personality. There are these founders that, you know, we I've heard the term wild stallion to to describe them where they are you know, they're like these these wild stallions. They have tremendous upside but they're also a little bit, you know, wild. And unless they sort Speaker 2 (00:57:02): of learn Can you Jason Calacanis (00:57:02): hit with the hoof? David Sacks (00:57:03): Yeah. I mean The hoof. they're they're they're they've got a lot of talent. Right? The the the talent is the the amount of talent you have is like the horse you're riding on. And some people are riding on a Bronco. They got a lot of talent, but it might Jason Calacanis (00:57:18): cost them off. Chamath Palihapitiya (00:57:18): I I I just think the real the real edge in investing is figuring out what is bluster and window dressing and show and what is actually aggressive thinking. Like, John and Patrick Collison, there's zero bluster with those guys. David Friedberg (00:57:31): Yeah. Those Jason Calacanis (00:57:31): guys are real. Those guys, David Friedberg (00:57:32): that company that company Chamath Palihapitiya (00:57:34): is gonna be that's David Friedberg (00:57:35): gonna be the most valuable valuable company that's private right now. Chamath Palihapitiya (00:57:38): these these guys are these guys are incredible, intellectually thoughtful killers. Speaker 2 (00:57:42): Right. Jason Calacanis (00:57:42): That's what they are. David Sacks (00:57:43): That's true. Yeah. Chamath Palihapitiya (00:57:44): But they outthink everybody. David Sacks (00:57:45): But there's also a maturation process that a lot of founders go through. Right? I mean, the collisons and suck, I think, got very mature, very young. I think there's other founders that it takes them a while to get more polish, get more disciplined, rein in the you know, the those emotions I'm not saying they're fraudulent. We don't wanna bet on fraudulent founders, but some founders need to learn how to harness the talent they have. Yeah. Chamath Palihapitiya (00:58:11): I agree with that. I agree with that. David Sacks (00:58:13): And and and those are the ones where it's very hard to know earlier in their career whether to bet on them or not. Right? Because because they they may get it under control or they may not. It's you can't tell at the beginning. Jason Calacanis (00:58:23): Here's the analogy we use internally. It's like being Professor X and the X Men. You could have a gene or a wolverine, and, like, everybody's got a different superpower, but you need to teach them how to use that superpower so they don't self destruct or cause chaos. -- David Friedberg (00:58:36): bifurcate the other way. Right? Jason Calacanis (00:58:38): They could be magneto. Right? You could you could go the other way. Not sure David Friedberg (00:58:42): I get all the references, but I hear you. Jason Calacanis (00:58:44): Well, I mean, I'm kind of shocked given how much of a huge nerd you are. David Friedberg (00:58:48): I don't Jason Calacanis (00:58:48): I don't understand the x men. David Sacks (00:58:50): Jason? I Chamath Palihapitiya (00:58:50): love that movie I love that movie with the guy who's made of all the rocks and the little tree guy who's his buddy. That's what Speaker 2 (00:58:56): it says. Jason Calacanis (00:58:56): Guardians of the Galaxy. Yes. David Sacks (00:58:58): I think I think Jason's favorite character is the blob. Is that Speaker 2 (00:59:01): the one? I think that's covered. Does you? You got COVID too early. I dropped COVID 15. What Jason Calacanis (00:59:07): are you talking about? Speaker 2 (00:59:08): How how many how many of David Friedberg (00:59:09): those Jason Calacanis (00:59:10): Kibano sandwiches are you having. David Sacks (00:59:11): Look at your face, dude. Jason Calacanis (00:59:14): How many cro no Croquette does, Sacks? David Sacks (00:59:17): No. You're alright. That shouldn't have gotten that. -- salad. That idea shouldn't have gotten there. You're right. Chamath Palihapitiya (00:59:21): Yeah. Side salad. David Friedberg (00:59:23): Zach's What what is your what Speaker 2 (00:59:24): is your training? David Friedberg (00:59:25): Well, Zach, what is your health plan? Are you now that we're coming out of it? Are you running? Or Jason Calacanis (00:59:28): -- Chamath Palihapitiya (00:59:28): We got David Friedberg (00:59:29): an intervention right now. You look terrible. Chamath Palihapitiya (00:59:33): You do look a little bloated. You look like a You look like a puffed fish. David Sacks (00:59:37): Oh, jeez. I I need to lose, like, £20. They're David Friedberg (00:59:40): puffed fish. I'm down Speaker 2 (00:59:41): I'm down Jason Calacanis (00:59:41): 12 for my peak after the COVID peak. I'm feeling good. Just get a personal trainer. Chamath Palihapitiya (00:59:46): Speaking of COVID, what the hell is going on in India? My little scary. I thought the whole thing was we would they were taking hydraulic clerocoon for totally different reasons, and this is why it's Speaker 2 (00:59:55): so funny. Jason Calacanis (00:59:55): -- had some immunity or that it was hot. I mean, there was a million reasons of why they were not gonna get hit, and then now they're surging and we have 60,000,000 shots on the shelf, and the number of people getting shots is going down. This is America's chance to use instead of battleships and nuclear weapons, we can use this COVID to shape global policy. We should be getting vaccines to other countries and, b, once again, the shining light of the entire planet and humanity. Why are we not bringing shots to India now? We have so many extra. David Friedberg (01:00:30): I'm not sure. I'm just trying to pull up the India vaxx data per day. I'm not sure that there's a it's at that's as much the issue. Right? Jason Calacanis (01:00:40): I mean, it is scary to watch their their I mean, you're you're are our go to science guy, Friedberg. Tell us what we're looking at here on this chart. I mean, the daily COVID cases are now hitting 250,000 300000 Chamath Palihapitiya (01:00:52): a day just right now. Jason Calacanis (01:00:53): It broke 300. Oh my lord. In the United States, it's gotten down to, like, 50, 60. India, India, now. -- under 800. India David Friedberg (01:00:59): is now past the peak of the US. You know, India is now seeing more cases per day than any country has seen worldwide during the whole pandemic. at over, you know, 300,000 a day right now. And it's you know, it doesn't seem to be letting up, and we're now questioning whether it's testing that's the limiting in terms of reporting on these cases. So it's it's pretty nasty. Now there's a a famous Indian politician who who had been double vaxxed, who claims that he is COVID positive as is his mother and sister. So it's also creating a little bit of a concerned in the market about, you know, getting COVID. Like, he doesn't seem to be having a severe case which is, you know, one of the the kind of important things to take note of in vaccination is is it's not necessarily binary. but it's certainly making a lot of creating a lot of fear as a result of his kind of public statement about this. Jason Calacanis (01:01:56): This isn't just about cases either. 30 days ago, they were at 200 deaths a day. And, I mean, tragically, they're at 21100. So it's 10 x in 30 days. If it 10 x is again, that that's 20,000 people a day dying. This is a different level than any other country has experienced. -- tragic. and they don't have -- Speaker 2 (01:02:18): At the end at the end David Sacks (01:02:18): of a day -- They don't Jason Calacanis (01:02:19): have the the hospitals hospitals to handle this. Do they? This could become a a crisis of epic proportions. David Sacks (01:02:25): At the end of the day, a country's success in battling COVID's gonna be about how fast they can get their population vaccinated. It's very simple. Right? I mean, it Israel was first. They got everyone vaccinated. Now their cases are down to almost nothing. The US is doing pretty well, although there's some room for concern. We are doing you know, close to 4,000,000 vaccinations a day. Now we're at, like, 3, 3a half. They're starting to slip a little bit. Jason Calacanis (01:02:49): that does just have to do with Johnson and Johnson. Right? That has to do with people not showing up for appointments. Yeah. David Sacks (01:02:55): And I think you gotta blame the media a little bit because they keep running all these vaccine scare stories about, you know, how this person or that person, the vaccine punched through, and they got sick despite getting the vaccine. They keep selling. they keep selling all this, like, you know, COVID, scary, and porn. You know, the the the fear point. Jason Calacanis (01:03:13): Do you know what I noticed the other day on CNN? This is how insincere and ratings, desperate they are. When they put up their COVID stats, they put up cumulative cases and cumulative deaths. That's what they obsess on. And it's like, hey, dummies. We know what you're doing here. You're trying to scare people. You should show the graph of the debts going down, and then why can't you take your mask off if you're vaccinated and you're outside? That's given reward. You were talking about this last week. David Sacks (01:03:40): Yeah. Nate Silver had a really tweet about this. He said that wearing a mask after you're vaccinated is now it's like the the blue equivalent of the red MAGA hat where it's completely performative to say, hey, I'm on Team Blue, you know, even though, like, scientifically, it's meaningless. I I it's like the press They keep talking about this possibility that even after you're vaccinated and you could somehow, you know, treat keep transmitting the virus to other people. Look. viruses I mean, a free birkin can explain this better than me, but viruses do not have in themselves the machinery for replication. Right? They have to take over your cells hijack your cells machinery to replicate themselves. So first, they have to infect somebody, then that person gets, you know, gets the virus starts producing a lot of it, then they start shedding it. If you don't get really sick, you're not gonna be shedding a lot of the virus. You're not gonna be transmitting it to a lot of other people. And, you know, they talk about this this possibility as if it's like a real possibility that people could still be transmitting the virus after they're vaccinated, I mean, it's not a statistically relevant possibility. David Friedberg (01:04:43): Right. It comes down to this interpretation of everything being binary. And the reality is that all of this, it's on you know, a a a statistical curve or on a kind of a gray scale. And, you know, the Saks's point is a 100% correct. that the probability of someone who's been double vaccinated, getting infect getting infected and then being infectious in a meaningful way is so remote that it is not even worth kind of considering in a way. And and and being double vaccinated gives you such a significant, typically, Right? Not for everyone. Right? All immune systems are different. And part some of what we we might be seeing is the difference in kind of how people develop immunity but it is such a rare case that one could have a severe infection after getting a, you know, a vaccination is such that it it it shouldn't even be considered and kind of, you know, mentioned as being a reason for continuing to wear masks and not gather and not do things. And so, you know, we started out, as Saks pointed out, and I think this is such a true and important point. We started out with this, like, immediate politic politicization of what's the right thing to do to reduce the spread of the virus, and then that became the mainstay for that political affiliation. And now the transition of the new world that we live in, where most people are vaccinated, we have a better understanding of the science and the statistics and the mechanisms of transmission, we hold on and we grasp on to that initiating kind of belief system that was correct at the time, but isn't correct anymore. And it seems so difficult to get people to shift their mind. This kind of this behavior is an ignorant behavior, and you see it in so many manifestations right now. in particular with respect to masks and behavior after vaccination and so on. And it's it's really brutal to watch. But we obviously digress a bit from the Indian circ the India circumstance, which is a really nasty one. So it looks Chamath Palihapitiya (01:06:36): like -- Why why now and not a year ago? David Friedberg (01:06:38): You know, it's it's not clear. Right? So there's someone provided a a indication today that there may be as many as somewhere between a 102100 unique variants that that we're seeing emerge in India. So there may be a a lot of interesting variant interesting technically, but not obviously for for human life. But a lot a lot of dramatic variants or significant variants that might be increasing the the infectiousness right now. And and in particular, you know, behavior has shifted in a way that's an enabling, you know, some of these transmissions to occur. You know, a lot of people let their guard down and so on in a way that maybe they weren't 6 months ago. And, you know, there may be some forced evolution associated with partial vaccination, totally a theory right now where, you know, a 110,000,000 doses have been given in India so far So, you know, in order for a virus to succeed, the viral variants that are gonna infect more likely, you know, through a a partially transmit a partially vaccinated population are the ones that are winning out. So there's a lot of, you know, confounding factors here. We're not really sure, but it is it is pretty brutal what is what is going on. I will say, like, this notion that vaccination does not prevent protection against variants is not a binary statement either. I this is really, really important. I've been wanting to say this for a couple of of our shows. When you get this vaccine, what you're doing is you're training yourself, you're giving yourself the RNA to print the spike protein, and that protein is now in your body. Everyone's immune system then reacts differently to create antibodies to that protein. The antibodies that Chamath makes and Jason makes and Saks makes and I make are all gonna be different. Speaker 2 (01:08:20): But if Chamath Palihapitiya (01:08:21): you had to pick whose would be better, I mean, the obvious stuff was mine. David Friedberg (01:08:24): I can tell you Saks is probably gonna be worse off, but yeah. Chamath Palihapitiya (01:08:26): Jesus, you're the most sluggish for sure. David Friedberg (01:08:28): They're the slowest. Yeah. But but there there are there are likely tens of thousands of novel variants that our b cells will make that will that will bind to that spike protein and get rid of it. And we will each have many hundreds or potentially thousands of novel antibodies that our immune system will make. So keep that in mind. you now have a portfolio of antibodies that your body is producing to that spike protein. So now when when a when a COVID when a SARS CoV 2 virus shows up in your body, Some of those protein some of those antibodies are gonna be really effective at getting rid of it. Some of them are not. Now the protein in the SARS CoV 2 virus changes slightly, some of the other antibodies you have are gonna be effective, and some of the other ones are not. And it is that portfolio that is that is gonna change sorry, that that portfolio that is gonna define your success at fighting off a specific variant of SARS CoV 2 where the spike protein is changing slightly with each variant. Right? So these variants change the composition of the protein. The antibodies that you have are gonna be know, more or less successful depending on how that variant changes. And that's where there may be cases where the number of antibodies that you are producing or or the of the antibodies that you particularly have are a little bit lower for a particularly new variant. It doesn't mean that you're gonna have an infection that's gonna be a runaway infection in your body, it means that it might take you longer or it might be a little bit harder for you to clear that particular variant given the repertoire of antibodies that you've produced. And that's why this isn't that's why this isn't binary. Right? It could be that it's like, hey. This variant shows up. Boom. Instantly, I got rid of it. I don't have any infection, but someone else might have, like, you know, maybe a a a slight bit of you know, there might be a a couple days where they'll feel a cold as your body's clearing it out. And the measure of this is this this neutralizing tighter, which is the where they take people's blood with all of their antibodies in it, and they put these different variants in. And they can measure how effective your antibodies are getting rid of that new variant. And the the less effective your antibodies are, the higher this this this tighter needs to be And as a result, it could be a little bit longer, a little bit harder for you to get rid of that that virus. David Friedberg (01:10:29): And so so, again, like, when viral variants start to emerge in the population and as they kind of take off, and become more dominant, it doesn't mean that we don't have immunity. It means that immunity might be slightly affected. but not not it's not 1 or 0. Right? Because you've got 100 or 1000 of antibodies to to fight against COVID in your body. I think that's really important. So we should you know, while there may be some variants that might be what we call variance of concern, meaning they can kind of slip away a little bit from most of the antibodies you have, it doesn't mean you're not gonna be able to fight them off with the antibodies. And so I don't know if that was too technical or too difficult to understand, but I think it's really boring. Makes total sense. Yeah. David Sacks (01:11:06): Yeah. And and And and one thing just to add to that is is that most of the variants that the press keeps reporting with alarm that are somehow that that basically are gonna be vaccine proof. They turn out not to be. You know? The we they're very shortly, there there comes out a new article basically saying that the vaccines work. And so the press keeps reporting these isolated cases as proof of something that's not actually true. Jason Calacanis (01:11:33): Yeah. I mean, this is I just wanna give the press a kind of I just wanna make an accounting for the press in the last 30 days. 1, obsessing about every single shooting And then inspiring more shootings. When you obsess about these mass shootings, you inspire more of them. It is a proven fact. It is inducing people to do this more. It's not exactly correlated, but there is proof about this. Same thing with suicides. That's why we don't cover any young people killing themselves in the Bay Area in a certain town that we all know had a rash of them, or we don't cover suicides on the Golden Gate Bridge anymore because when they used to cover them and put it on the cover of the chronicle, two more people would jump off the next week. Number 2, they were obsessing about riots. I mean, I don't know if you turned on the TV during the deliberations. They were absolutely gleeful about the potential of trouble happening. And that, of course, incents more people to go out and see what's going on because you're gonna get on TV and because other people are doing it, and humans model other humans. And then finally, with the goddamn Johnson and Johnson, eight people have blood clots. Nobody died. Am I correct in that? And the -- One person died. One person died. Okay. So we don't even know. And then they obsess about that for days, like, you can't cover these things wall to wall and not think that they you don't have culpability, the CNNs, the foxes, etcetera. You're assessing over these things, and it's scaring people to not take vaccines. It's in sending people who are crazy. You're dog whistling crazy people to go get a gun and to use that as a way to get famous. And you're doing the same thing, you know, with the with these, you know, riots in the streets. Chamath Palihapitiya (01:13:17): We're we're all in the opinion business. Speaker 2 (01:13:19): And that's David Sacks (01:13:21): the -- But but the problem is when they just when they don't just hype things, but they actually give you factually incorrect information because you know, it's they're trying to scare people into getting higher ratings, you know, fear porn. Jason Calacanis (01:13:32): It's also framing, David, which is a different thing than lying about statistics. They would say we're not lying about the statistics. That's how many people died of COVID. But what they're doing is they're framing the cumulative number to make you scared. Today, 400,000 people have died from COVID. It's like, No. Over 14 months, 400 people, 1000 of COVID, 700 people die today, and that's the lowest number since November, but that wouldn't get more people to tune in. Chamath Palihapitiya (01:13:54): Boys, I wanna tell you guys something. It's frustrating. Yeah. I'm vaccinated. David Friedberg (01:14:01): Oh. I Chamath Palihapitiya (01:14:01): mean, I wanna see I wanna see you. See you. I wanna hug you. Keep a shirt on. It's it's 5:30 PM, and I've been working since 5 AM this morning. Speaker 2 (01:14:12): Oh, is that what Jason Calacanis (01:14:12): that look is? Chamath Palihapitiya (01:14:13): exhausted. I've exhausted. I I came back from Easter vacation guys, and I had been up between either at 5 AM or 6 AM every fucking -- You're working hard. You're working hard. I am grinding, but I am tired. Alright. Let's wrap here. Jason Calacanis (01:14:28): When we as we wrap, what what's going on just because people have been asking what's going on with the SCC and specs and and just some more reporting or something? because I I was watching CNBC, and they said, hey. You're doing everything right, but there's a lot of other people who are doing things wrong. Explain to us what's going on. Chamath Palihapitiya (01:14:43): It's I mean, it's a it's a very specific accounting issue, which is that some specs, many specs, and in fact, many companies. Let's just put it that way, not just specs, but many companies use warrants. And the prevailing guidance on certain warrants was that they were equity. And, basically, that gets put into a balance sheet statement where you have equities assets and liabilities, and, you know, it sits on one side. And, basically, what they said was they issued some refined guidance. That's an in these specific cases, these should be really listed as liabilities. So then it needs to move from this column to that column. But when that when you do that, you go through, you know, a bunch of gating implications and effects and, you know, revisions and restatements. And so that's what the that's what the entire securities industry is dealing with right now, which was you know, this guidance by the SEC and the implication. So that was on 12th. I mean, just so you know, today, we just filed the updated all of our updated docs plus the updated s 4 for SoFi. So we were able to work around the clock and just kinda get it done. And, hopefully, what we've also done is create a a bit of a way forward in a path that other folks can use to kind of, like, accelerate their their progress, but it's definitely created a ton of work, but but we're I think we're I think we found the right answer. Jason Calacanis (01:16:00): So -- Ultimately good for you because you wanna see an e button dot. Right? Chamath Palihapitiya (01:16:04): Yeah. And and, also, I think, like, the simpler path forward. So, I mean, if you just think about capital market stability for a moment, like, warrant coverage should probably go away, number 1. Right? So take all the warrants to 0. Second thing that should happen is that, you know, I think this is an opportunity to take a step back and figure out how to really make sure that the specs sponsors are of the highest quality. somebody told me this incredible thing today. I am one of 5 groups that put up any money when we do a pipe in our deals. Meaning, he said to me 95 percent of sponsors put up literally a Jason Calacanis (01:16:33): $0.0. Chamath Palihapitiya (01:16:36): And so course, you're gonna have, you know, extremely loose underwriting requirements if that's the case. And so, you know, the idea that I'm thinking about which someone proposed to me which I think is very clever is this idea that, you know, you earn more of the promote, more money you put up. Right? So for example, like, you know, you know, in in soFi, I think we put in Jason Calacanis (01:16:56): $275,000,000. Chamath Palihapitiya (01:16:58): So, I mean, we we really you know, that's a meaningful commitment. And it closes the gap between, you know, what your equity is issued at and what investors are buying at, and that's very healthy. Right? And so I think there's all these mechanisms that will clean up the stock market. We need to have a much more refined criteria to allow people to be sponsors. And we need to make sponsors in a position where they must put in money so that they actually do the work. If you get something for free, let's be honest, you won't do the work. If you're forced to write a check, Jason Calacanis (01:17:35): how can I really think about it? Show me an incentive. I'll show the outcome. And this happened on AngelList, where in the beginning days of AngelList, you had some angels, quote unquote, who didn't have any money, so they put a 1000 or 2000 into a deal, then they would have 500,000 come behind them. And so you had this 500 to 1 ratio of dollars to skin in the game. And it was like, well, why wouldn't a syndicate lead put every company out there and not even put you know, they have no skin, which is why when you have a venture fund, I don't know what they expect us to put in typically -- Well, the problem is Chamath Palihapitiya (01:18:07): venture funds are 1 to Jason Calacanis (01:18:08): 2%. Chamath Palihapitiya (01:18:08): I was 25% Well, 1 to 2% is Jason Calacanis (01:18:11): it could be pretty significant if you're doing a fund every 3 years. I'm doing this, and it's it winds up being 1,000,000 of dollars for me, but I'm happy to do it because I believe in my own ability. Alright. As we wrap anybody have a plug or anything they wanna let people know about? Chamath Palihapitiya (01:18:23): Oh, I I I wanna talk about this one little thing. I just not to talk about it, but I would like to tell you guys to read it because it so interesting. Basically, like, European Soccer tried to incite a revolt where, like, the top teams across all the different leagues came together to try to create a super league, but it ended up like, they they were like a band of evil villains and, like, fans erupted. Everybody erupted. And then you know, it it existed for 24 hours. But in that 24 hours, it looked like a complete rewriting of sports and sports like, laws and, you know, it was an incredible thing. There's an article in the New York Times. I'll I'll post it in here and Folks wanna read it. It's really, really fucking funny. Jason Calacanis (01:19:04): And that will be on season 2 of Ted Lasso? I don't know if you guys watched Tim Cook's Key note this week with the new Imax, which are really beautiful. He was so excited about Ted Lasso. And Ted Lasso is a great show, but I mean, it literally is the the Apple show. Do anybody you guys see Ted Lasso yet? Chamath Palihapitiya (01:19:23): What is it this television show? Jason Calacanis (01:19:25): You guys haven't seen Ted Lasso, the TV show yet? Chamath Palihapitiya (01:19:27): Is it on NBC or CBS? Or what what Chamath it on? TV plus. Whatever that is, Apple -- Is it on Chamath Jason Calacanis (01:19:34): 6? -- TV plus. You gotta go on your Apple TV and then find Apple TV plus on your TV, and you'll find it eventually. It's it's one of their pay you know, they have their own Netflix competitor called Apple TV plus. So on your phone, if you type Apple TV, you'll have Apple TV -- I Chamath Palihapitiya (01:19:50): have Apple TVs. I have Apple TVs behind my TVs. Jason Calacanis (01:19:52): No. No. But there's Apple TV plus. which is their Netflix. So there's a plus. Is David Friedberg (01:19:56): it a better Apple TV? Chamath Palihapitiya (01:19:58): No. No. No. It's content. Jason Calacanis (01:19:59): It's a content subscription you could have. They they just They screwed that part up. Hey. Shout out. I just wanted to get Sorry. Chamath Palihapitiya (01:20:07): So who's who's Ted Lasso? Jason Calacanis (01:20:09): Ted Lasso is Adjacent Sidakis comedy that is incredibly heartwarming about a really heartwarming, joyful kind person who goes from America to the UK to become a soccer coach. You would. Chamath Palihapitiya (01:20:25): Yeah. You would hate a day. Speaker 2 (01:20:28): That's not cynical. I do. I hate it. Chamath Palihapitiya (01:20:29): I hate it. David Sacks (01:20:29): I hate it. Speaker 2 (01:20:30): I hate it. Chamath Palihapitiya (01:20:31): You should watch you should watch you should watch Gamora on HBO back. Jason Calacanis (01:20:35): Oh, I started it. Yeah. Woofah. On time. Yeah. I got to the Speaker 2 (01:20:39): what's the Jason Calacanis (01:20:39): first episode. David Sacks (01:20:40): I'm like, woah. Jason Calacanis (01:20:41): Here we go. Chamath Palihapitiya (01:20:42): It is so super. And, also, you should watch it in the original language because it's not really Italian. It's like, Neapolitan. And so, like, You know, I can catch that and understand maybe 20 percent of the words, and I said to Nat, I said, what language is it? She's like, I have no idea. I watched it in Italian subtitles. So it was It was beaut it's beautiful. Beautiful. It's so intense. It's like the wire, but, like, I mean, you know, suddenly, it's incredible. after life is also good. Ricky Gervais. Jason Calacanis (01:21:08): If you want something cynical and heartwarming, that's for you, Saxx. Chamath Palihapitiya (01:21:11): Love you, guys. Love you, Saxx. I'll see you now. What what just come back to the Bay Area so we can play poker -- Yeah. Speaker 2 (01:21:16): Yeah. Yeah. -- on the back. David Friedberg (01:21:17): Why don't you just why don't we go all the way back? Jason Calacanis (01:21:20): -- David Friedberg (01:21:20): Miami. Are we going to Miami? Jason Calacanis (01:21:22): I'm going to going on Speaker 2 (01:21:24): a trip. Jason Calacanis (01:21:24): I'll just leave it Speaker 6 (01:21:25): at that. I'll touch you guys for fun. What? Chamath Palihapitiya (01:21:26): I'm gonna Speaker 2 (01:21:27): go to Chamath Palihapitiya (01:21:27): the recognizance trip. What? Recognizance. Yeah. Ricognizance. I'm gonna be able to understand what's going on. Do you understand that that that term is more associated with bail and in jail than it is Speaker 2 (01:21:40): what you think it means. Chamath Palihapitiya (01:21:42): reconcysence like a Jason Calacanis (01:21:44): -- Chamath Palihapitiya (01:21:44): Jason, you are released on your own recognizance. Jason Calacanis (01:21:46): That's what I'm talking about. Chamath Palihapitiya (01:21:48): You wanna do reconnaissance. Reconocence. That's what I said. The reconnaissance. David Sacks (01:21:53): Yeah. I think you'll be wearing an ankle bracelet on your recognizance. David Friedberg (01:21:59): Actually, y'all, Speaker 2 (01:22:00): they don't they don't David Friedberg (01:22:00): fit on David Sacks (01:22:01): the sandals. That's a mispronounced one word Jason Calacanis (01:22:03): to make it a good episode. David Sacks (01:22:05): For Jason, it'll be a cankle bracelet. Speaker 2 (01:22:08): Yeah. Like, can you talk mister doughboy? Jason Calacanis (01:22:10): What are you talking about? Speaker 2 (01:22:12): My god. What do you Is Chamath Palihapitiya (01:22:13): it called a bracelet if you're a calf and your ankle are the same David Friedberg (01:22:16): or shake upwards? Jason Calacanis (01:22:19): Put his way. If Saks Saks is wearing 2 of them right now, you'd never know. Yeah. Speaker 2 (01:22:23): Sang is Jason Calacanis (01:22:23): wearing wine on his neck. What happened to your Speaker 2 (01:22:25): neck, Zach? David Sacks (01:22:25): Wow. Wow. Where's your neck? Speaker 2 (01:22:28): We're out. We're out. We'll see you. David Sacks (01:22:29): Right. See you Jason Calacanis (01:22:30): drop the over here. Speaker 2 (01:22:32): Love you, guys. Chamath Palihapitiya (01:22:33): Love you. Love you, besties. Bye bye. We'll see you Jason Calacanis (01:22:35): all next time. Speaker 2 (01:22:37): We'll let your winners ride. Jason Calacanis (01:22:40): Rainman, David Sachs. Speaker 6 (01:22:44): And it said -- We open source it to the fans and they've just gone crazy weather. Speaker 2 (01:22:53): what airliners were right. Bestiest article. I don't know the 13th stop. David Friedberg (01:22:59): That is why they are dogs like, you know, driveway checks. Speaker 6 (01:23:07): We should all just get a room and just have a think you, George, because they're all these useless. It's like this, like, sexual tension that they just need to release somehow. Chamath Palihapitiya (01:23:15): What? You're the bee bee. flirt. David Sacks (01:23:18): You're a thief. Speaker 2 (01:23:19): Sweety. Sweety. Jason Calacanis (01:23:20): Where did you get Murkeys are back?